Nov 24

97% LTV Home Purchase & Refinance Program

Our 97% LTV Purchase Loans designed to open doors for more low to moderate income borrowers, first-time homebuyers and move-up borrowers, and those that lack the funds for a down payment and closing costs.  This loan program is made possible by lowering the customary 5-20% down payment range to just 3%, and by expanding sources of funds that borrowers can use for their down payment and closing costs.


Key Features Overview

  • Owner-occupied Primary Residences (attached or detached home)
  •  Offering a low down payment to more easily qualify for home financing
  •  NO – Prepayment Penalty
  • No Reserves – NONE (2mo. recommended for emergencies) or 1 pending credit histories or 2 months if Teacher or Public Safety Employee
  • Affordable Seconds – permitted (see: Affordable Seconds) Maximum CLTV: 105%
  • Community Second – permitted (see: Secondary Financing Assistance) Max. CLTV: 100%
  • PUDs (Property Under Development) financing
  • Cooperatives – for Teachers or Public Safety Employees Only (max. LTV 90%)
  • 1-unit SFRs (Single Family Residence) 15, 20, 30 year terms
    •  Modular homes, and Prefabricated homes (double-wide unit built after 06/15/76)
    • Min. LTV: 95.01% Max. LTV: 97%
  • 2-unit (30 year term for 2-unit)
    • for Teachers or Public Safety Employees Only
    • Min. LTV: 97%, Max. LTV: 105%
  • 3, 4-Units Not Allowed


Borrower Funds for the 3% downpayment, closing costs, financing costs and prepaids/escrows, can be obtained from a variety of sources (5% for 2-unit home with 3% from borrowers own funds).

  • Seller’s Contribution – Limited to 3% of the lesser of the sales price or appraised value.
  • Borrower’s personal cash – checking, savings, 401(k) account or a life insurance policy, or similar accounts, or
  • Cash-on-hand for Borrowers who do not use checking, savings, or similar accounts, but may be a limited user of credit. Cash-on-hand may be used if the following are verified:
    • Monthly receipts or alternative doc’s indicating Borrower has no checking, savings, or similar accounts
    • and Updated credit report shows no new accounts or no substantial increase to existing accounts that approximate the amount of cash on hand,
    • and It can be confirmed that the Borrower would have sufficient income, given normal household expenses, to have saved the cash provided.
  • Gifts from relatives, domestic partner, personal finance, or financing from fiancé
  • Affordable Seconds (80/20 loans)
  • Community Second
  • Grants, Gifts or unsecured loan from a relative, domestic partner, fiancé, or fiancée, nonprofit agencies, nonprofit community organization, government agency, or the Borrower’s employer that need not be repaid.
    • Unsecured loan from the Borrower’s employercannot be due and payable, and Borrower must retain the right to make payments on it in the event that the Borrower no longer works for the employer.

Note: None of the required 3% may come from any lender generated or funded source.



Borrower’s Income
Borrower’s income may be up to and including 100% of area median income with exceptions in certain high-cost areas designated by Freddie Mac.  Information about median income, central cities and targeted census tracts for Colorado can be found at:


No income limitation if the subject property is located in a concentrated area. A concentrated area is:

  • An area designated by HUD as a central city.
  • A census tract with an area median family income of 80% or less.
  • Any 1990 census tract where nonwhite and Hispanic persons comprise 50% or more of the population


Income – Teachers or Public Safety Employees Only:

For borrowers qualifying as a teacher or public safety employee, overtime and part-time income may be used to qualify the borrower under all of the following conditions:

  • The employer verifies that the borrower has received the income for the last 12 months.
  • The employer indicates in all probability it will continue.
  • The income used to qualify is a most recent 12 month average.
  • Rental Income: If one of the units is rented or intended to be rented, 75% of the rent or projected rents for the unit may be added to the borrower’s income when calculating the debt ratios.


Debt Ratios(total-expenses to total-income ratio)
-teacher/public safety borrowers: The max. SFR qualifying ratio is 41%.

A teacher or public safety employee: The max. SFR qualifying ratio is 45%or 50% w/two months reserves. Note:  All two unit properties: The max. qualifying ratios are 35/43%.


Rental Income
Rental Income from a related person residing in the Borrower’s primary residence is allowed provided all of the following conditions are met:

  • The relative has resided and paid rent on a regular basis with the Borrower for at least one (1) year.
  • The relative will continue to reside with the Borrower in the new residence.
  • The rent paid does not exceed 30% of the total qualifying income.
  • The relative has supporting documentation for the residency and the receipt of rental income is verified.


Credit Requirements – Credit Score > 600 preferred) and credit score < 660 A-minus rates may apply.


Housing Payment History – If the borrower has had either of the following, careful evaluation of their credit history to determine if the problems were due to extenuating circumstances or financial mismanagement:

  • More than one 30-day late housing payment in the last 12 months, or
  • More than two 30-day late housing payments or more than one 60-day late payment in the last 24 months.


Mortgage Insurance REQUIRED (must have certificate prior to closing)

  • A minus (A-) pricing applies for borrowers with credit scores less than 660
  • Credit scores < 660 and the subject property is a 1 unit or < 620 and a 2 unit property
  • Borrower has Nontraditional credit or no credit score